Oil prices fell in early trading on Thursday (June 18, 2026) after the U.S. and ​Iran signed an interim agreement that would end the Iran war, ‌reopen the Strait of Hormuz and waive U.S. ​sanctions on Tehran’s oil, resolving the largest energy ⁠supply disruption in history.

Brent crude futures were down 89 cents, or 1.12%, at $78.66 a barrel as of 0005 GMT, ‌and U.S. West Texas Intermediate fell 98 cents, or 1.28%, to $75.81 a barrel.

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The benchmarks resumed their ‌decline, reversing gains made on Wednesday (June 17) after U.S. ‌President ⁠Donald Trump said he could resume his bombing campaign ⁠if Iran’s leaders “don’t behave”.

“The sell-off extended as energy markets continued to aggressively price in a faster-than-expected return of Iranian barrels following the recent ​U.S.-Iran memorandum of understanding,” IG ‌market analyst Tony Sycamore said in a note.

The 14-point memorandum begins a 60-day negotiation period during which Iran will allow toll-free passage through the Strait of ‌Hormuz, a key oil and gas shipping lane. ​The deal calls for traffic through the strait to be restored to its full capacity within ⁠30 days.

The preliminary accord defers many of the more difficult issues such as Iran’s nuclear program, and also requires ‌the U.S. and its partners to come up with a $300 billion plan to finance Iran’s recovery.

If the agreement is successfully implemented and the strait reopened, this year’s supply crisis could turn into a significant supply glut in 2027, the IEA cautioned on Wednesday (June 17), forecasting in its monthly ‌market report that supply will outstrip demand by 5.05 million barrels ​per day next year as West Asian oil returns to the market.

The U.S. Federal Reserve ⁠is also increasingly weighing whether it will need to raise interest ⁠rates later this year to rein in inflation, which could slow economic growth and suppress oil demand.

Nine ‌of 19 Fed policymakers now think a rate hike will be needed, Wednesday (June 17) projections showed, a departure ​from three months ago when none of them held that view.